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Income Tax Refund in India: Eligibility, Procedure and Types

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Hiral Vakil

Form 12BB
ITR Refund
Salary Components
Last updated on April 9th, 2021

A taxpayer becomes eligible for an income tax refund when taxes paid are higher than your actual tax liability inclusive of interest. It could be in the form of advance tax, self-assessment tax, TDS, etc. In the following instances, the taxpayer becomes eligible to claim tax refund:

How to claim Income Tax Refund?

A few basic things to keep in mind if you want to claim a refund.

Once you have filed your income tax return, you need to wait for assessment from the Income Tax Department. Here what you need to do:

File Your Tax Return

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Types of refund status

Once a tax payer files his return, they want to know the status of their refund. IT Department has classified different refund statuses for the taxpayer. It is important to understand the meaning of refund status. Since refund status determines the next course of action that needs to be taken by the taxpayer.

Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
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Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
Explore

Different Refund Status on income tax e-filing website:

Refund Status Meaning Course of Action
No e-filing has been done for this assessment year You have missed filing the return for that assessment year. OR The paper return was filed for that year.    File your Income Tax Return immediately. You can file your return from here.
Not Determined IT Department has still not processed your return Confirm if your return is filed and duly e-Verified. 
Refund Paid IT Department has sent the refund to you.  If you have not received a refund yet: In case of direct credit to your bank account contact your bank. In case of refund cheque, check out with the post department.
No Demand No Refund This means you have claimed a refund in your return but as per the department’s calculation, you are not liable for a refund.  In case of any error in a filed return, revise your return. OR If you have received an intimation then understand the reason of difference and then file rectification return.
Refund Unpaid Income Tax Department has sent a refund to you but either your address is wrong or bank details provided are incorrect.   Find out the reason for refund failure and then raise a refund reissue request
ITR processed refund determined and sent out to Refund Banker The department has sent the refund details to the refund banker. Contact your bank. 
Demand determined Department has rejected your refund claim and raised an outstanding demand.  Understand the notice. If you find that your own refund request was erroneous then pay the demand. OR If there is a mistake made by the department, you can file a rectification.
Contact Jurisdictional Assessing Officer Whenever the department needs some more information regarding your ITR. You receive this message. Contact your AO via telephone, mail or post.
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Interest on Income Tax Refund

Many times the taxpayer does not get the refund in due time, in such a case Income Tax Department pays interest on late refund. However, no interest shall be payable if the amount of refund is less than 10% of the tax as determined under section 143(1) or tax determined under regular assessment. Section 244A mentions the provisions in this regard which are as follows:

Amount of Interest on Refund

Taxability of Interest on Income Tax Refund

The interest amount is taxable under the head “Income from other sources”. Further, while filing returns for the financial year (FY) in which the refund was given, the interest will be taxable as per the tax slab rate of the person.

FAQs

Why am I not getting any refund?

Your may not be getting refund for one of the following reasons:
1. You may not have filed an income tax return for the relevant assessment year
2. Your taxes paid matches your total tax liability for a relevant assessment year
3. You might have forgotten to claim taxes paid on your return
4. You might have furnished incorrect bank account details in your return

Is income tax refund taxable?

No, refund received by a taxpayer is not taxable. But, any interest received on the refund is taxable in the year in which refund is received by a taxpayer.

How long does it take to get a tax refund?

Income Tax Department processes the refund only after processing your ITR. Generally, it takes 30-45 days from the date of e-verification of your Income Tax Return to get your refund credited. Further, IT Department is planning on processing refund faster in coming years.

What needs to be done if the refund is not processed?

Taxpayer’s records are transferred to the jurisdictional assessing officer by CPC after a particular time period for every assessment year. Taxpayers receive an intimation regarding the same. Therefore, once the AO receives the files, one can follow up for a refund by submitting a letter in this regard to the jurisdictional assessing officer and follow up personally at regular intervals.

Where will I get my income tax refund?

You will receive your refund directly in your Primary bank account. You can choose the primary bank account while filing your ITR.

What to do if my tax Refund is returned?

If your tax refund status is ‘refund returned’ then it means when ITD had tried to credit the refund to your bank account, but it failed. In such a case you are required to submit a refund reissue request.

Got Questions? Ask Away!

  1. Hi @emmy

    You can make a Refund Reissue request with the correct account details.

  2. Hi @shashank_udupa, Any excess tax paid on LTCG/STCG will be given as refund. Refund cant be claimed otherwise.

  3. I have submitted my ITR two months back, and I have to receive around 40000 in a refund. I want to know when it will be processed.

  4. Hey,

    Income Tax Department issues the refund only after processing your ITR. Generally, it takes 30-45 days from the date of the e-verification of your Income Tax Return to get your refund credited. Make sure that you have e-verified your ITR since the ITD does not process your return until it is verified.

    You can track your Income tax refund status using this tool.

    Learn more about types of Income-tax refund status.

  5. Hi ,
    I had received an ITR refund last year(and some interest on it) , do we have to include the refund amount(or the interest earned on it) of previous year in current ITR filing for FY21-22, asking this since there is a field "From IT refund " under Income earned from interest. Kindly let me know if this is the case or can I leave it blank. Please explain in a detailed manner if possible . Thanks
    in advance

  6. Hey @Sheirsh_Saxena

    Interest on Income Tax Refund is a taxable income under the head Income From Other Sources (IFOS). You need not report the amount of tax refund. However, the interest amount must be reported under IFOS and is taxed at applicable slab rates. Further, the amount is reflected under AIS i.e. Annual Information Statement too. You should verify the amount and enter the same in your income tax return to avoid tax notice for mismatch.

  7. In the AIS(for assessment year 2022-23) the mentioned amount is 28540, how much of it is interest, where do I check it. The refund amount is mentioned for the assessment year 2021-22 , as “ECS (direct credit to bank account)”. SO what amount should I mentioned is it the complete 28540, or only interest component on it

  8. Hey @Sheirsh_Saxena

    The difference in the amount of refund claimed in the ITR and the refund issued by the ITD is the interest on income tax refund. Alternatively, the breakdown of refund and interest is also reflected in Form 26AS available on the income tax website.

  9. But in my form 26AS , Part D - Details of Paid Refund is empty

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